South Korea Financial Supervisory Service reports KRW55.9 trillion in overseas real estate investment and flags higher default exposure

The South Korea Financial Supervisory Service published data showing Korea’s financial companies held KRW55.9 trillion of overseas real estate alternative investments at end-December 2025, up KRW0.8 trillion from three months earlier. The exposure equaled 0.7% of total financial sector assets. Insurance companies accounted for the largest share at KRW31.4 trillion, or 56.2% of the total, followed by banks at KRW11.9 trillion and securities companies at KRW7.2 trillion. By region, North America remained the main destination with 61.4% of total investment, ahead of Europe at 18.1% and Asia at 6.4%. On the maturity profile, 19.8% of total investments, or KRW11.1 trillion, is set to mature in 2026, while 67.6%, or KRW37.8 trillion, will mature by 2030. For investments in individual properties, KRW32.3 trillion was outstanding at end-December 2025, and 6.45% of that amount, or KRW2.08 trillion, was exposed to events of default. The volume of event-of-default exposure increased slightly from the previous quarter because of new default events at some properties in the fourth quarter of 2025. The Financial Supervisory Service said it will examine whether financial companies are taking appropriate loss recognition measures and will continue to push them to improve financial soundness. It also plans to monitor compliance with risk management guidelines to ensure overseas real estate investments are made within a robust risk management framework.